Tesla Motors opens up patent portfolio

With vehicles that are 100 percent electric, and a business model that sells directly to consumers rather than through dealerships, Tesla Motors has made a name for bucking the conventions of most automobile manufacturers. Now, that pioneering spirit has been applied to the company’s robust portfolio of patents.

On June 12, the company announced that it will stop enforcing the patents that it holds, starting an open-source inspired program aimed at catalyzing the electric car movement. Tesla will still own the patents but has promised to abstain from litigation against companies that use those patents in “good faith.”

Tesla CEO Elon Musk said in the announcement, “When I started out with my first company, Zip2, I thought patents were a good thing and worked hard to obtain them. And maybe they were good long ago, but too often these days, they serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors. After Zip2, when I realized that receiving a patent really just meant that you bought a lottery ticket to a lawsuit, I avoided them whenever possible.”

Increasingly the “stifling of progress” Musk mentions seems to be validated. A recent MIT study showed a direct link between frequent patent litigation and a decrease in venture capital available to startups.

Likely the most attractive patent in the portfolio is Tesla technology that allows for the rapid recharge of electric car battery cells. Despite winning multiple automotive awards and increased market share for its cars in the last year, Tesla is still a new player in the space and has as of yet been unable to make a vehicle within the grasp of the average consumer. This patent play could conceivably allow a much larger automaker to utilize already available infrastructure in conjunction with Tesla technology to create cheaper electric cars for the mass market, accelerating the shift from fossil fuel vehicles.

“Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world’s most talented engineers. We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard,” Musk said.

Given that the electricity powering electric cars in the United States is still generated primarily by coal-fired power plants, questions remain surrounding their current eco-friendliness. However, in conjunction with an Environmental Protection Agency proposal that seeks to cut greenhouse emissions 30 percent by 2030, the move towards electric vehicles sets the groundwork for a much cleaner future.

Executive Editor

Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...